Good News on the Housing Front

It is quite clear that stabilization of the housing market is an absolute requirement for turning the economy around.  Today, we finally got some good news on that front.  New housing starts jumped 22% and new building permits rose 3% — both much better than expected declines in both metrics.

In other piece of good news, core prices rose 0.2% in February.  This rate is quite benign (not too high) and it is also positive, which puts a damper on deflation fears.

While it is clearly early to call a bottom yet, any positive news are welcome.  Maybe the rally we had last week in the market was justified after all.